[This Birmingham company is taking on the major handset manufacturers and hopes to position Britain as one of Europe's mobile leaders.]

by Lucas van Grinsven -- "Britain may have been a frontrunner in mobile communications since the second world war but it is now one of the few European countries not to boast a cellular phone manufacturer. That is about to change.

"A group of industry executives, who learned their trade at US and European phone companies, this week announced their intention to take on their former employers Nokia, Ericsson and Motorola.

"Their Birmingham-based company, called Sendo, plans to be producing tens of millions of mobile phones within a few years.

"Its first phone is due soon, a high-end model that will compete with the most expensive handsets, to demonstrate that the venture is serious.

"With only 100 staff, set to double this year, the management thinks it can take on the industry's giants.

"Analysts give Sendo a fair chance. Angela Dean, telecommunications analyst at Morgan Stanley, says: "It sounds crazy for a new company to enter the mobile phone market, but perhaps it is not so crazy."

"She points out that Motorola and Ericsson are struggling to turn in a profit, though a much smaller producer like Siemens can make healthy returns.

"What really saves mobile phone manufacturers money is not so much their scale, as their design", says Mrs Dean.

"This is what Sendo is banking on.

"It will be making a few million units, while Nokia is doubling its capacity to 100m, but by using only half the number of components that other manufacturers are putting in their handsets, Sendo should be able to compensate.

"Clever design is just one of the innovations of the company that quickly developed into a deadly serious venture.

"Formed last year with backing from an unnamed Asian investor who took a minority stake, Sendo plans to take on the industry's biggest manufacturers on five key fronts: cost, size, weight, performance and component count.

"Sendo intends to make its mobile phones the cheapest, smallest, lightest and most energy-efficient in their class.

"It will have to rely on close collaboration with its suppliers to reach its goals. Speed is vital, and Sendo's Birmingham offices - where the management sits among engineers and marketeers in one large room - are designed to allow it to react as quickly as possible.

"One employee says: "We can avoid some of the mistakes others have made. When a problem occurs, people sit together and say, 'When I was at Nokia we used to do this', and then another goes, 'Where I was, we tried this, but it did not really work'."

"The Birmingham company might have poached talent from the large mobile phone manufacturers, but they will otherwise hardly notice Sendo's existence in the first few years.

"While Nokia struggles to double capacity to more than 100m phones just to keep up with market growth, Sendo will churn out perhaps a few million.